Buyer Beware! Don’t Overspend Just Because of Discounts.
First of all, we want to wish everyone out there a very Happy Thanksgiving. We are very grateful to everyone who is part of the extended Illumination Wealth family!
With Thanksgiving weekend, however, also come the biggest consumer “holidays” of the year. We have Black Friday, Cyber Monday and even Small Business Saturday. And, so-called Black Friday sales start on Thursday at most major retailers these days. It’s enough to make your head spin because there are so many great deals that are hard to pass up.
Or are they?
Flash sales are exciting and fun. If you really need something specific or you are shopping for the holidays, you might find what you want at a really low price. At the same time, however, Black Friday and Cyber Monday deals can also be a major trap. They are designed to tap into the frenzy of consumer culture and make you spend more than you need to. Sure, you are getting good prices on everything, but most people end up buying a lot more than they intend. Credit card bills are racked up, your spending cash is all gone before you know it and your normal budget is thrown off track.
Nothing But Regrets
The truth is, a lot people end up regretting most of their Black Friday purchases when they look at all the final bills. You don’t really need a new TV. Yet, when Walmart is selling them for pennies on the dollar and you have to act quickly before they sell out, it’s human nature to make the impulse buy. At the end of the day, you still ended up spending more than you expected to and you have an extra television sitting in your closet.
This “buyer beware” warning is very apt this time of year, but it applies year-round. We all fall prey to seeing things on sale and buying what we don’t really need. How many times have you done it at the grocery store? There is a reason that junk food items are always on sale because they are the ultimate impulse buy. All retail sales are a recipe for overspending and it’s a good reason why so many people struggle with credit card debt and other financial issues.
Even large purchases like new cars can be examples of this—with even more financial consequences as you pay off several years of a high-interest auto loan or lease. Even if you pay all cash upfront, you are eating significant depreciation on the vehicle the moment it drives off the lot.
It Can Happen to All of Us
Wealthy individuals who have plenty of extra money to burn still find themselves making impulse buys that they later regret. In fact, the more money you have to spend, the more you are likely to waste. No matter what your financial standing, the money you are wasting on unnecessary purchases could be used to put into savings, your retirement plan or strategic investments. That TV will be worthless in a couple years, whereas the hundreds of dollars you spent on it could ultimately be worth thousands if invested wisely!
When it comes to smart management of your finances, how and where you spend your money is so important. You should always look for the best price on anything you buy. Just prioritize what you actually need and try not to fall into the impulse buy trap—even when the sale is too hard to resist. Find a way to resist it and always think before you pull out your wallet. There are better things you can be spending your money on to live a more enriching life and to set yourself up for a better financial future.
Making the Right Financial Decisions
For more smart financial planning tips and ideas, follow the Illumination Wealth Blog. If you need financial guidance and are looking to make the most out of your money moves on the way toward financial independence and an early retirement, contact us today for a no-obligation personal consultation.